Margaret Joan Smith (Trustee) v Bordier Bank (TCI) Ltd. (CL 17 of 2022) [2022] TCASC 24 (22 August 2022)

Flynote

Banking

Case summary

The Court ordered: Subject to the Plaintiff undertaking: a) to comply with any order that the Court might make if the Court were later to find that this order has caused loss to the Defendant and decide that the Plaintiff should compensate the Defendant for that loss; and b) not to use the information obtained except for the purposes of discharging the duties and obligations of the Plaintiff pursuant to the terms of her appointment by the US Bankruptcy Court, the Defendant shall on or before the effective date of this order, make disclosure and deliver up to the Plaintiff with respect to account “abia #846”. 1) the bank statements, signatories and any powers of attorney relevant thereto; 2) all internal KYC documents held with reference to the account; 3) all correspondence, internal memoranda and written instructions received by the Defendant in relation to the account; 4) all wire transfer, EFT or ACH payments, confirmations and requests, details and/or receipts, or any document sufficient to identify the date and amount of the transfer and the identity, account information and financial institution of the transferor and transferee. The Plaintiff shall serve a copy of this order via courier on Abia Management Co. S.A., at its registered address. The Plaintiff shall pay the Defendant’s reasonable legal and other costs in relation to these proceedings and complying with this order.  The parties shall have liberty to apply.   As the order may affect ABIA, it was intended to give it a further opportunity to be heard. Based on the evidence before the court, it was satisfied that this was an appropriate case to pierce the corporate veil and to treat ABIA as the alter ego of the Debtor. It follows from that finding that as the trustee of the Debtor’s estate, the Trustee is entitled to the documents and information she seeks. However, depending on the nature and contents of the documents disclosed, an order for the examination of a representative of the Bank may not be necessary. The Trustee can make a further application for such an order if it appears necessary after a review of the documents and information disclosed.   Finally, the Court found that the Bank was entitled to the costs incurred in complying with the order. The Trustee had not suggested that the Bank is guilty of any impropriety, and it will plainly incur costs in complying with the order. It is usual and appropriate in those circumstances to order the applicant to pay the reasonable costs of the third party who is being required to comply with a disclosure order [10]. It is also usual and appropriate, for the order to be conditional on the applicant undertaking to comply with any order the court may make as to any damages the third party may suffer as a result of the order [11].

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